Before goods can be moved they must be obtained. Sourcing is the identification, evaluation, and selection of suppliers that can provide required products or services under acceptable commercial and risk conditions.

Activities include market research, request-for-proposal processes, capability assessment, negotiation, and contracting. Strategic sourcing looks beyond unit price to total cost, quality, capacity, and geographic risk. Dual or multi-sourcing decisions trade complexity against resilience.

Logistics performance depends heavily on supplier location, lead time, and reliability. Poor sourcing decisions create chronic expediting and inventory problems downstream. Strong sourcing aligns supply markets with the company’s service and cost objectives.

• Identification and selection of suppliers
• Evaluates capability, cost, quality, and risk
• Includes negotiation and contracting
• Shapes downstream logistics performance